WHEN Omid Kordestani first met Larry Page and Sergey Brin, he was a successful
business-development executive at Netscape Communications, the browser
company that opened the world’s eyes to the power of the internet, and they
were 25-year-old drop-outs from Stanford University – albeit with a
promising search engine called Google.
At the time – early 1999 – Google employed only four or five engineers in a
garage in Palo Alto, California, and had no clear idea about how it was
going to make any money. Kordestani was introduced to them because he
thought Netscape might be able to make some use of search.
It didn’t turn out quite as Kordestani expected. Sitting at a ping-pong table,
he was soon embroiled in a six-hour interview, with the inexperienced Brin
calling in his engineers to help in the cross-examination. At the end,
Kordestani took them all out and bought them dinner at a Chinese restaurant.
“The sparkle in their eyes, this real idealistic view that they could change
the world, was clear from day one,” said Kordestani last week.
“That simplicity was really what attracted me, that innovation was so clear. I
was convinced that even if they decided to build furniture, it was going to
be the most innovative furniture that you’d ever seen.”
So, two months before the birth of his second child, Kordestani took the “very
risky and scary move” to become Google’s 12th employee.
As the world knows, it turned out pretty well – for Google and for
Kordestani. The advertising business that Kordestani built is today worth
nearly $150 billion (£76 billion), and his own fortune is estimated at $2
billion.
Google now employs more than 12,000 people, though it continues to take
exhaustive care over new recruits. Page personally signs off on all new
hirings every Wednesday.
Britain has been a big part of Google’s success, contributing 16%, or $578m,
of total revenues in the first three months of this year. With strong growth
in Germany, France and Spain as well, the company has just promoted
Indian-born Nikesh Arora to the new role of president for Europe, Middle
East and Africa.
“Nikesh is doing a tremendous job,” said Kordestani, who, as senior
vice-president for global sales and business development, is Arora’s boss.
From having only 400 staff when Arora joined in November 2004, Google Europe
now has 2,000 employees, with engineering centres in London, Zurich, St
Petersburg and Trondheim in Norway. Among its important European partners
are the BBC and Axel Springer, the German publishing group.
Google had always seen itself as “a global phenomenon”, not just an American
business, said Kordestani. He was given the job of globalising the newly
profitable company when Eric Schmidt, a Silicon Valley veteran, took over as
chief executive in mid2001.
“Eric told me to get on a plane and don’t come back until we have
international revenues reflecting our international usage,” he recalled.
When he arrived in Britain, Kordestani had to hold meetings in hotel
lobbies. Google was already Britain’s most popular search engine, but it did
not have any offices here.
Like Brin, Kordestani is an immigrant to America. He was born in Iran and grew
up there, attending an Italian Catholic school in Tehran that emphasised
education and language skills. As a boy, he spent a lot of time in London
with his parents.
The death of his father prompted his family to move to California in 1978 when
he was 14. By coincidence, this was only one year before the Iranian
revolution “turned our whole world upside down”.
Along with Schmidt, Kordestani will be back in Britain again tomorrow to
attend Zeitgeist, the company’s annual gathering to discuss technology
trends with industry leaders. This year’s participants include WPP’s Sir
Martin Sorrell, BSkyB’s James Murdoch, the BBC’s Mark Thompson and David
Miliband, the environment secretary When Kordestani joined Google, the
fledg-ling firm was still experimenting with ideas for generating revenue,
including licensing its search engine to other websites and large companies.
Contrary to the suggestion in The Search, John Battelle’s book on the
company, Kordestani said Google’s founders were never opposed to advertising
per se, only to intrusive banner ads that detracted from the all-important
user experience.
“Our founders were very savvy,” he said. Despite the dotcom euphoria, Page and
Brin were keenly aware that Google could not become successful without
customers, and that revenue “is not a bad word”.
Kordestani said it was interesting that everything that Google tried had made
money. “Our enterprise business has grown to be a very successful business
by itself,” he said. Google Apps, as it is called, charges companies a fee
for a suite of Google’s software, including e-mail, instant messaging, word-processing
and spreadsheets. However, this business is dwarfed by the colossal success
of search-based advertising, which generated the bulk of Google’s $10.6
billion of revenues last year.
The great advantage of key-word advertising is that advertisers can quickly
see what works and what does not.
Kordestani said this was only the start, and the company planned to apply the
same data-driven approach to other forms of advertising: television, print,
radio and emerging formats such as on mobile phones.
“Our vision is very simple,” he said. “The effectiveness and accountability
[of search] can extend to all these new areas. There’s not only a lot of
spending in other segments, but there is a great desire among customers to
have the same view into the performance of this advertising, and be able to
understand how best to allocate budgets between the different formats.
“It’s about efficiency and accountability. The ultimate vision is [to create]
a dashboard that helps chief marketing officers to have real visibility of
how best to spend money and allocate their budgets. There’s a lot of power
in that.”
Google’s broadening ambitions recently prompted it to spend $3 billion to
acquire Double Click, a firm that acts as an intermediary between web
publishers and online advertisers.
Last week, the growing potential of digital advertising prompted Microsoft to
spend $6 billion on Aquantive, the owner of the leading agency Razorfish.
WPP, one of the world’s biggest marketing groups, bought 24/7 Real Media of
New York for $649m.
Every Monday, Kordestani reviews Google’s most important partnerships, with
input from Schmidt, Page and Brin. The involvement of the founders is one
indication of their determination to remain much more than figureheads.
The power balance within the triumvirate is a source of considerable
fascination in Silicon Valley. It is widely assumed that Brin and Page, who
are still large shareholders, ultimately call the shots, irrespective of
Schmidt’s position as chief executive.
Kordestani said: “They have their own areas of passion where they spend their
time. Eric and Larry spend a lot of time with our engineering teams,
reviewing the priorities and doing rapid reviews of the products.
“Given the phenomenon and given how fast Google has grown and how ambitious
our vision is, it’s great to have three great brains at the top of the
company sharing that responsibility.”
GOOGLE NUMBERS
10100: A googol, the name for the number 1 followed by 100 zeros from which
the trademark ‘Google’ was derived.
1998: The year that Stanford university students Larry Page and Sergey Brin
founded the company.
$23 billion: the valuation of the company when it was floated on the stock
market in 2004.
8 billion: the number of web pages that Google searches in less than half a
second.
$3 billion: Google’s annual profits (2006)
Googol or GoOgle.. whatever the story maybe, the moot point is that Google's unprecedented success is the ability of Brin and Page to forecast the next big thing! Their story is a source of inspiration for all of us to think ahead and believe in the unbelievable!
Binodan, New Delhi, India
Google got its name from googol - at least that's what they want you to think. The name was actually derived from Google's initial purpose - a porn search engine. Google = Go Ogle. True story. But of course they'd never tell you that, would they?
Mark, Luton, UK
Absolutely googling amazing - where to next?
Rashmi Panchal, London, UK